LiveOne, Inc. (LVO) Q2 2019 Earnings Report, Transcript and Summary

Good morning, and welcome to the LiveXLive Media Second Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. At this time, I would like to turn the conference over to Whitney Kukulka, Investor Relations. Please go ahead.

Good morning, and welcome to LiveXLive financial results conference call for the second quarter of fiscal year 2019 ended September 30, 2018. Joining me on today’s call are Rob Ellin, Co-Founder and CEO; and Mike Zemetra, CFO. I’d like to remind you that some of the statements made on today’s call are forward-looking, and are based on current expectations, forecasts and assumptions that involve risks and uncertainties. These statements include but are not limited to statements regarding the future performance of LiveXLive including expected financial results for the third quarter and full year 2019 and the future growth in our business. Actual results may differ materially from those discussed in this call for a variety of reasons. Please refer to the Company’s filings with the SEC for information about factors which could cause our actual results to differ materially from these forward-looking statements, including those described in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018 and subsequent SEC filings. Importantly, this conference call contains time sensitive information that is accurate only as of date of this call November 14, 2018. You will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in our earnings release, which is posted on the Investor Relations of the website at ir.livexlive.com. And I encourage you to periodically visit our IR website for important content. The following discussion including responses to your questions reflects management’s view as of today November 14, 2018 only and except as required by law, we do not undertake any obligation to update or revise this information after the date of this call. Now let me turn the call over to Rob Ellin. Rob?

Thank you, Whitney. Thanks everyone for joining us. LiveXLive has made tremendous progress in our second fiscal quarter. Just many of you new to story, let me reiterate a few of the key principles of our business. First our mission statement, we founded LiveXLive to deliver the first ever social live music platform around the globe, providing the consumer with the most authentic and immersive music experience in the last 25 years. Our mission is simple, to bring new experience in live music and entertainment to music fans, wherever music is watched and listened to around the world. At the highest level, our goal is to bring fans, bands and brands together, while enhancing value and introducing new revenues to the entire music industry. We accomplish this by leveraging technology to capitalize on the mega trends of our industry including live streaming, over-the-top delivery, mobile and highly, shareable content. LiveXLive allows music fans to seamlessly move through our apps to watch their favorite artist perform, their favorite festivals, concerts, award shows, fans to move seamlessly through our site and our apps to approach to watch the greatest music festivals. This includes original programming, including interviews, backstage, behind the scenes, red carpet in a full slate of original programming. We deliver all this while using technology to offer the most immersive experience with consumers that while watching you can chat and message. And in the very near future, you will be able to date, buy tickets and acquire merchandise. We get you as close to live experience as possible. You may not be standing in the venue, but we will give an opportunity to certainly have the best seat in the house. As useful way to frame our business is that we’re utilizing the ESPN playbook applying to the music industry, they create the next generation MTV and a large profitable music network using modern mobile first technology that the course wasn’t available then, we are fortunate to have world-class executives to join our team, including Steven Bornstein and Roger Werner, who guided and built the originally ESPN. We have a simple but powerful business model. First, we’ve aggregated audio and video streaming rights in many of the biggest music festivals, biggest music events in the world. Secondly, we have a neutral and independent position with the industry that is allowed LiveXLive the opportunity to partner with all labels, promoters, publishers, agents, managers, and most importantly, the biggest artists in the world. Third, we have a paid subscriber base that is rapidly approaching 600,000. Slacker Radio is one of our key assets and have done a tremendous job changing the trajectory of that business since we acquired in December, enhancing the experience for our subscribers with over 370 curated channels and now adding for the first time video to the audio experience. And fourth, we’re developing a slate of original programs that further differentiates LiveXLive from any other music network. For example, we’re about to officially roll out LiveZone or SportsCenter for music festivals at Rolling Loud in Los Angeles, one of the top hip-hop festivals, advance your initiatives that become the most authentic platform for music again in 25 years. Now turning to the progress for the quarter, we delivered record financial performance, posted over $8 million in revenues, up 5% for the quarter. We added approximately 60,000 subscribers and ended the quarter with 549,000 paying subscribers, representing a 12% sequential growth. Today, six weeks later, we’re about 585,000 subscribers. We live streamed the record eight festivals in the second quarter, up from five last quarter. We have live streamed 16 of the biggest festivals in the world this year to-date. These included world-class immense like Jazz Montreux, Paleo Festivals in Switzerland, the Global Dance Festival, HARD Summer Festival, Rolling Loud in California, Sziget in Budapest, Bumbershoot, Seattle, and Life is Beautiful in Las Vegas. These streams included some of the biggest artists across all genres of music including Shawn Mendes, Travis Scott, Florence and the Machine, Arcade Fire, The Chainsmokers, Lil Wayne, Portugal. The Man, Kendrick Lamar, John Mayer, and The Killers. We’re reaching a very large and rapidly growing audience and drove more than 40 million views year-to-date. Year to date, our live streams have generated over 400 hours of live content and featured 350 of the biggest artists in the world. We developed the slate of original programming over 200 plus pieces of short form content. And we maintain a solid cash position and in Q2 with $14.1 million cash versus $15.9 million at the end of Q1. We remained focused on strengthening our balance sheet and diligently managing cash flows. We continue to strengthen our world-class management team with the best in the industry. They’re in the quarter, we added Matt Baxter is Head of Content to programming and Tad Ro as Head of Product discuss a little bit of that background shortly. We produced our first ever live event with Playboi Carti and Designer. Our festival footprint is growing and is based on key partnerships with promoters across all genres. We’ve seen, especially the strong festival growth with Insomniac and Live Nation and our partnerships with Rolling Loud Festival and AEG. Just this weekend we stream EDC Orlando filming on the EDM’s leadership with many of the biggest EDM fest around the globe and making us the thought leader in dance music. We’ve publicly announced will stream 27 plus festivals and music events this year. So growth drivers, second half of 2019 really becomes exciting. As I mentioned earlier, we’re also diversifying into award shows, concerts, venues, and original programming. Original content will also be the key to our story. During the quarter, we began to launch our slate of original programs including pilots, personalities, and you do take some of the music industry and lifestyle. We have thrilled to be added Matt Baxter, Head of Content to our programming. Matt comes with a strong background of heading content at Spotify, Buzzfeed and then LiveNation TV. As we entered the back half of fiscal 2019, we’re in preparation for launch. One of the most critical components of our business LiveZone, which we’ll showcase new and exciting technology and brand sponsorships as early as December. LiveZone, our SportsCenter of music has been tested at several festivals over the summer. We will formally be launching LiveZone with breaking news, festival highlights on air personalities and behind the scenes and Rolling Loud at Los Angeles in December. As I mentioned, we also added Tad Ro as Head of Product bringing his unique background and experience across live music and mobile, formally heading product for Spin Media, TMZ and Verizon. We began rolling out certain features in the second quarter and we fully expect next generation of our platform to be the first ever social live music network for passionate fans. Our users will be able to simultaneously watch concerts, chat with other fans, buy merchandise, and launching curated channel on their Slacker app. We believe that combining the power of social with live streaming, the ever growing experience, it will make LiveXLive the premier destination for viewing live events. Turning to our subscriber growth, as I mentioned, we’re approaching 600,000 paid subscribers and a clear line of sight to 1 million. The combined DNA of Slacker LiveXLive around the original program live to consumer, the first opportunity to enjoy that a combination of audio and video focused specifically on original program. Key to our success has been OEM deals with automakers and telcos. We are more than 80 different automobiles and we have exclusive partner across all Tesla cars. You’ve seen the massive uptick in deliveries of Tesla vehicles and we are in every one of those cars, we should benefit from the growing ramp of Tesla deliveries across all their models. We also have bundled deals with three of the four major carriers, including Verizon, T-Mobile and Sprint as one of the – as well as one of the largest carriers in Canada. We fully expect in 2019 to expand to the rest of the world. The subscriber growth shows that we’ve completely turnaround Slacker business, which was losing subscribers monthly. We have spent the last 10 months focusing on integration, cost cutting efforts, and it made substantial progress. We’ve integrated the management teams and technologies, so that we can drive impressions to Slacker and increase active daily users on LiveXLive. Key to driving subscriber growth is our focus on technology. Slacker and LiveXLive combine content programming teams who are building in network of both audio and video channels, which stretch across mobile, TV apps and in-car infotainment. Slacker furthers LiveXLive’s ability to drive innovation across technology and entertainment, while providing the company with access to a new base of consumers and music enthusiasts. Finally, we expected major partnership one of the largest music services around the world, which would expand our strategic global music partners. We rapidly created the next generation of LiveXLive web properties, mobile, OTT apps and you can now watch across iOS, Android, Apple TV, Roku, Fire TV. I also mentioned the development of our proprietary player, the first social player, that enables the first immersive experience of watching a live event and simultaneously allows you to message, chat, buy tickets, buy merchandise and experience as close to a live event. I’m pleased to say that we’re on track and expect this new social live music network, player app to be available shortly, allowing us to capitalize and significant monetization opportunities in social and live. So in summing up, we’re pleased with our second quarter results. I want to remind everyone that we are focused on long-term. We’re making strong progress or we’re in a very early innings of this game, where up quarterly results are important, I want to reiterate the long-term goals we laid out last quarter. First, we believe within five years, in 2023, we will have at least 10 million paid subscribers on our platform. We are approaching 600,000 today and growing at double-digit rates on a quarterly basis. Secondly, we believe we can stream over 100 festivals a year. Again, we’ll stream 27 this year and growing going to next year. Third, we expect to have enough content air 24 hours a day, seven days a week, we’re making strong progress here and very excited about the launch of LiveZone. Fourth, we continue to expand our distribution footprint across all digital platforms, we’ve now signed partnerships, YouTube, Facebook, Twitch, Dailymotion, we’ve partnered across the globe with Tencent and expect to continue to expand our distribution globally. We’re executing well, securing valuable properties and assets, growing paid subs, watching proprietary technology, programming and rapidly growing our audience is all bodes well for the long-term monetization opportunities. We couldn’t be more excited about the future. We’re here in New York all week and look forward to seeing investors and analysts at upcoming conferences and happy to set up meetings for anyone interested. I’m going to hand it off to Mike Z. Thank you very much.

Great and thank you, Rob. We continue to the first half of our fiscal 2019 with strong results including Q2, 2019 revenue of $8 million, adjusted operating loss of $3.6 million and record subscriber in festival live streams during the period. Given our lack of operating history year-over-year, my Q2 financial commentary will focus on quarter-over-quarter sequential performance as compared to the first quarter of fiscal year 2019. More specifically on Q2; Q2 consolidated revenue was $8.0 million up 5% quarter-over-quarter from $7.6 million in Q1, 2019 due to quarter-over-quarter growth in our paid subscribers. I will get into deeper discussion into revenue drivers later in my prepared remarks. Q2 consolidated contribution margin with a loss of $0.2 million as compared to a loss of $0.9 million in Q1, 2019. The sequential improvement of $0.7 million quarter-over-quarter was principally driven by improved margins across our subscription business, coupled with lower overall costs to produce live stream festivals in Q2 versus Q1 2019. Again, I will discuss these drivers later in my prepared remarks. Q2 adjusted operating loss was $3.6 million versus $4.6 million in Q4 2018 – sorry, Q1 2019, the $1 million improvement quarter-over-quarter was driven by the previously discussed margin improvement from our music operations and to a lesser extent from decreased general and administrative expenses largely driven by timing of year-end audit and personnel related fees. During Q2 and Q1 2019, we also capitalized approximately 0.7 million in each quarter of internally developed software cost. Now, I would like to discuss the financial performance across our music operations in corporate divisions. Turning to music operations, our music operations consists of our audio and internet radio services from Slacker radio, which we acquired in December 2017 along with our live stream operation, sales, marketing and product development supporting our music operations and to a lesser extent certain general and administrative costs. As previously discussed our Q2 revenue of $8 million was up 5% quarter-over-quarter from Q1 2019, largely due to growth across our paid subscribers offset slightly by a decline in licensing revenue quarter-over-quarter. During Q2, our music operations generated $7.2 million in subscription revenue as compared to $6.6 million in Q1 2019, a 9% improvement quarter-over-quarter. Driving this improvement was a 12% sequential increase in ending net paid subscribers across our music platform. We ended Q2 with 549,000 paid subscribers up 60,000 or 12% from Q1 of 489,000 paid subscribers. The quarterly net increase in paid subscribers was driven in part by the strength of our B2B consumer driven business, which includes the likes of Tesla, Verizon, T-Mobile and also from increased additions across our consumer paid subscription services. More recently, we began investing in online marketing campaigns including leveraging impressions from live events to further grow our paid subscriber base. Through today, any paid subscribers have increased by a net 140,000 or 31% paid subscribers to 585,000 from 446,000 since March 31, 2018. We expect our any paid subscriber growth to continue experiencing strong double-digit percentage growth quarter-over-quarter throughout the remainder of fiscal 2019. Our Q2 contribution margin was a loss of $0.2 million versus a loss of $0.9 million in Q1 2019. The sequential improvement of $0.7 million quarter-over-quarter was driven by improved margins, driven by the growth and mix of our paid subscriber business coupled with lower overall costs to produce eight live stream festivals in Q2 versus five live stream festivals in Q1 2019. As discussed, our revenue grew in large part from our paid subscriber base, which led to higher contribution margins in Q2 versus Q1. As a percentage of revenue, our contribution margin across our subscription business also improved significantly by 2.3 whole percentage points from 24.3% in Q1 2019 to 28% in Q2, driven in part by a higher mix of B2B and radio plus subscribers, which are generally more profitable versus other subscription services. Moreover, we incurred $2.4 million of production costs or approximately $0.3 million per festival as compared to $2.8 million of production costs in Q1 or approximately $0.6 million for festival. As a reminder, Q1 included the cost of producing stream EDC Las Vegas, one of our largest and most elaborate festivals. As we discussed last quarter, our average cost of produce festivals in Q1 was expected to be higher versus our average expected cost to produce each festival throughout the remainder of the fiscal 2019 year. As a reminder, we are still in the early stages of launching our live stream advertising and branded sponsorship capabilities. And expect these corresponding revenues to commence in the second half of 2019. As Rob mentioned earlier, we also expect to showcase our monetization capabilities across the number of initiatives beginning in Q3 2019, including new and exciting advertising and sponsorship initiatives plan for Rolling Loud, Los Angeles, one of the largest hip hop festivals scheduled to live stream December 14 through the 15. As a result, we continue to expect our music operations contribution margin to fluctuate throughout fiscal 2019, as we ramp these new revenue sources in the back half. Q2 music operations adjusted operating loss was $2.4 million, as compared to $2.9 million in Q1 2019. The quarter-over-quarter improvement was largely driven by the previously discussed improvement in music operations, contribution margin in Q2 versus Q1, 2019. Turning to corporate, our corporate division principally consists of general and administrative function such as executive, finance, legal and other areas that support the entire company including any public company driven initiatives and supporting functions. Q2 corporate adjusted operating loss was $1.2 million as compared to $1.7 million in Q1 2019. The quarter-over-quarter improvement in adjusted operating loss was driven by the timing of year-end audit and certain personnel related expenses in Q1 versus Q2 to support our growth. Now, I would like to discuss the trends in our operating expenses quarter-over-quarter. Excluding non-cash stock-based compensation, amortization expense, depreciation, and certain non-recurring operating expenses of $6 million in Q2 2019 and $5.6 million in Q1 2019. Q2 operating expenses were $3.3 million in Q2 versus $3.7 million in Q1, an improvement of 11% or $0.4 million quarter-over-quarter. The quarter-over-quarter improvement was largely driven by timing of year-end audit fees and certain personnel related expenses as previously discussed. Turning to our balance sheet, we ended Q2 2019 with cash of $14.1 million, down $1.8 million from ending cash of $15.9 million in Q1 2019. The quarter-over-quarter decrease was largely driven by net cash used in operations of $1.3 million, a net cash outflows from investing activities of $0.6 million in Q2 2019. The Q2 net cash used in operations of $1.2 million, improved by $2.3 million quarter-over-quarter from Q1 of negative $3.5 million largely driven by quarter-over-quarter improvement and our adjusted operating loss coupled with net savings in our working capital largely driven by active management of our existing payables. Now, I would like to update you on a few additional items. During Q2, we converted an aggregate $0.1 million of unsecured convertible notes into seventeen point seven thousand shares of common stock, bringing our year-to-date to $1.2 million in unsecured convertible notes into approximately 393,000 shares of common stocks. As of today, we have approximately $4.6 million of unsecured convertible notes outstanding. As of September 30, 2018, we had approximately 167,000 warrants outstanding and approximately $2.5 million of potential common stock underlying our secured debentures and unsecured convertible notes. We ended the quarter with approximately 52 million common shares outstanding. Turning to guidance; we are updating our full year 2019 guidance as follows; 2019 full-year revenue increasing to $37.5 million to $45 million, up from $35 million to $45 million in prior quarter. No change to 2019 full year adjusted operating loss of $10 million to $12 million and no change 2019 full year CapEx range from $2 million to $3 million. Consistent with our previous communications, we expect to live stream up to 27 festivals in fiscal 2019. Lastly, I would like to point out a few conferences we will be presenting at – in the upcoming quarter. Craig-Hallum’s Ninth Annual Alpha Select Conference tomorrow November 15 at the Sheraton Times Square in New York City. Raymond James, 2018 Technology Investors Conference, December 4 in New York City, the LD Micro December 5 through 6 in Los Angeles, and Maxim’s Group First Annual TMT Conference December 11 in New York City. That concludes my prepared remarks. We’d now like to open up the line for Q&A.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And your first question will be from Ron Josey of JMP. Please go ahead.

Hi, this is David on for Ron. Few questions, with $35 million music festivals, festival live stream since May 17, can you talk about perhaps some of the tests you’re running from an advertising perspective? And what do you think needs to happen for advertising to start to ramp here? And number two, we noticed more of an integration of LiveXLive content and fees across Slacker. Can you talk about the integration here of both apps and how you plan, how you see this playing out over time? And then finally on Tesla, how should we think about a Model 3 in Tesla sales relative to Slacker subscriber growth. Thank you.

Okay. So as again, first question, was just to make sure I have from, so on the advertising front, as Mike articulated, we are highly competent and we’ve just started to build out our sales team, expect to announce our CRO imminently and are highly competent that you’ll start to see the first real rollout sponsorship and advertising at Rolling Loud in December.

Got It.

So the integration of LiveXLive and Slacker has happened quicker and more efficiently. I mean, imagine Mike Bebel who is President of Slacker has done an absolutely spectacular job. Any of you met him and his background running Napster and PressPlay and Universal Digital. We’ve done a couple of things. So the first thing we did is, we’ve integrated video. It’s a Slacker. So as you listen to Slacker, you’d have the ability to watch our live events. 50% of our daily users are watching the live event. And second thing, we’ve done is in the interim of watching our sponsorship, right from December is we’ve utilized the inventory by marketing Slacker, which is driven over 10 million impressions to Slacker and we hope to see substantial conversion of that over a period of time. And you always had something, previously we just really building that funnel again, that didn’t exist previous to our acquisition of Slacker bridge, really exciting to see the amount of impressions that are being driven there. In terms of Tesla is really simple, exciting, right for everyone. We’re in every U.S. car, all models, as Tesla and our – we had a subscriber. We fully expect you to continue to grow that and we hope to in the very near future to be looking at expanding outside of the U.S. to the global markets. Dave, is that answer your questions?

Yes, that was helpful. Thank you.

[Operator Instructions] And the next question will come from Kevin Dede of HCW. Please go ahead.

Yes. Thanks a lot for taking my call. Couple of things, I see, can you just driven a little bit on the use of capital, specifically how about improved. It’s not so clear to me and I was wondering if you could talk a little too about the production cost per festival. And whether or not the increased that you’re expecting is associated with LiveZone, maybe just some more detail there.

Sure, sure. So as Mike articulated our cost per festival went down substantially this quarter. And as we’ve articulated previously, we brought all of our production team in house, our directors, our producers, we’ve also, because of the massive amounts of live events. So we’re doing the amount of days we’re doing. We’ve negotiated economies of scale with the truck companies and cameras and staff and so on. So our costs were about $300,000 per festival. LiveJournal app add a little bit of cost, but not substantially, because we already have our trucks, our cameras, our system, our hosts and our anchors for at these live events. So there won’t be a substantial additional cost to that.

So did I misunderstand Rob, did he not say that he expected cost per festival to increase in December? I’m just kind of maybe I misunderstood.

No, no. So in Q1, we produced EDC Vegas, right, which will be or at least to-date is our most expensive festival. So on a per average cost, we did five festivals. We are about $600,000 in Q1. In Q2 that average over eight festivals went down to about $300,000. We’ve always said that on average will be between $300,000 to $400,000, and we fully expect that to continue throughout the remainder of this year.

Okay, perfect.

And then on use of capital, you want me to go ahead and answer that?

Yes, yes, yes. Thank you, thank you.

Yes. So during the quarter, we had an improvement in our – we’ll call it our cash burn, which would be our operating expenses in our CapEx. More specifically on cash flows from operations, it was $1.3 million, right, negative. That was driven by our adjusted operating loss of $3.6 million, right, offset by a benefit in working capital, largely driven by us actively managing our payables. On top of that, we incurred roughly about $0.7 million of CapEx, largely associated with capitalize internally developed software.

Okay, okay. Yes, sure. I can view it and go into details of the offline. I also curious about the launch of LiveZone, and that’s the – is that the Rolling Loud festival in LA mid-December.

Correct. So I highly recommend anyone that has an opportunity to turn this. It’ll be the launch. So we’ve test, launched, as you’ve probably watched, we’ve had about 25 correspondence in host, right. And if you think CNN or ESPN, who have from around the globe reported on, interviewed backstage and brought us these great experiences, right. We’re bringing that all together, right, with the addition of Matt Baxter and the rest of the content team to launch LiveZone, which will be that SportsCenter of music and give the ability to move from live – from stage to stage and from live event around the globe.

Okay. Could you just give us a sort of bird’s eye view of the physical setup? I mean, how many stages will there be? How many sort of counters are you expecting? Is there a stage or is there sort of a production room backstage at each event or each stage?

Yes. Just to give you a chapped it today, because this is going to be a pretty special weekend we’re launching, but just think of it like the Olympics or the U.S. Open, right, or SportsCenter. We’re going to have the best piece of real estate inside of the stadium, right, with an opportunity to bring all those artists, right, in for interviews, right, and to be able – for them to be able to participate in the experience where those hosts and anchors, right, or bringing their fans to them around the globe.

Yes. I think it’s important, Kevin, that we’re going to be showcasing some new branded sponsorship capabilities, not just only across LiveZone, but across the festival in general, as well as bringing into the forefronts of new and exciting technologies with a specific partner. So we’re super excited about all the things we’ll be showcasing. So stay tuned.

Okay. So that partnership is almost to the point where you could announce it.

We’ll hopefully be announcing it shortly. We’re not quite there yet.

Right, okay. And you mentioned a sponsorship at the festival too. So that includes, obviously, you touched on the IMAG Board. Can you talk a little bit of that?

I wouldn’t specifically focus on the area sponsorship, just know that we’ll be launching LiveZone, its full capabilities. We’ll also be our live stream sponsorship capabilities, and then other events – other areas as they come up.

Kevin, what’s exciting about this is now our sales team has the opportunity to sell across from live to digital. So our inventory increases dramatically. We have some of the best pieces of real estate inside the live event. And then the ability as you can see by the numbers that typically these events are driving about 100,000 tickets sales per day, right. And we’re hitting about an average of about 3 million people viewing, so about 10 times the weekend audience already and growing. So for advertisers, they have an opportunity to participate both in live, as well as reach 3 million viewers across our network.

Okay. Yes, thanks for touching on that, Rob, because that was my next question. You know, sort of the – how to cap off your monetization of the whole deal. All right, well, I had a 100 more questions, but I cede the floor for now.

Great. Thanks. Thank you, Kevin.

Thanks.

And Ladies and gentlemen, that will conclude our question-and-answer session. I would like to hand the conference back to Rob Ellin for any closing remarks.

Sure. I just want to thank everyone for attending and it’s great to see additional new people joining the call. It’s really exciting to see almost 40,000 new subscribers so far in the last six weeks. So we continue to grow in the first quarter. So we’re going to grow 10,000 a month to 20,000, and as you can see now it’s more like 25,000 to 30,000 a month. And we expect that to increase dramatically, and as I stated before, we see very much insight going from 600,000 to 1 million in the near-term.

Thank you, sir. Ladies and gentlemen, the conference has concluded. We thank you for attending today’s presentation. At this time, you may disconnect your lines.